Homeowner hits Fay Servicing with $25m suit alleging dual tracking
Del Real says he did exactly that – submitting a new application with a borrower assistance form, pay stubs, bank statements, home insurance proof, and a letter of financial support. Then, on September 22, 2026 – less than two weeks before the scheduled sale – the filing says Fay Servicing sent a letter titled “Acknowledgement of Additional Documentation; Loss Mitigation Application Remains Incomplete,” asking for still more paperwork. The suit says Del Real immediately sent the requested documents, completing his application before the sale date and the stated deadline.
The sale was still set for 3:30 PM on October 7, outside the Butte County Courthouse. Del Real filed his lawsuit that same day.
A servicer already on the CFPB’s radar
The filing leans on Fay Servicing’s regulatory track record. It cites a June 7, 2017 CFPB order that, according to the suit, sanctioned Fay Servicing for what the filing describes as “illegal and predatory mortgage practices and mortgage servicing failures.” The servicer allegedly “kept borrowers in the dark regarding foreclosure prevention options and even took prohibited foreclosure actions while mortgage assistance was requested,” the suit says.
The filing also cites an August 21, 2024 CFPB order that, according to the suit, found Fay Servicing violated the 2017 order along with Regulation X, the Homeowners Protection Act, Regulation Z, and the Consumer Financial Protection Act.
Six claims, including racial discrimination
The lawsuit brings six causes of action: racial discrimination, wrongful foreclosure, dual tracking under federal rules, violations of the Fair Debt Collection Practices Act, violations of the Real Estate Settlement Procedures Act, violations of California’s Rosenthal Act, and violations of California’s Homeowner Bill of Rights.
